Bethlehem Steel is reflected in the Lehigh River in Bethlehem, Pa., in 1995. The author went to the town to understand the effect of charter schools on Pennsylvania’s public schools. (Nanine Hartzenbusch/AP)

Charter schools have become a central feature of the school “choice” movement, itself a key part of corporate school reform, which seeks to operate public schools as if they were businesses rather than civic institutions. There are now thousands of charters — which are publicly funded but independently operated, sometimes by for-profit companies — enrolling a few million students in 43 states and the District of Columbia who make up about 6 percent of public school students across the country.

While they are a small minority of the public school student population, outsized controversy surrounds charter schools in many communities, especially in states where lax oversight has resulted in financial irregularities and traditional public schools are negatively affected. There are so many issues surrounding charter schools that in October 2016, leaders of the NAACP, the oldest civil rights organization in the United States, bucked intense pressure from charter supporters and ratified a resolution calling for a moratorium on the expansion of charters and for stronger oversight of these schools.

Here’s a cautionary post about the impact of charter schools in one school district in Pennsylvania, one of a number of states with extremely lax charter school laws. It was written by Carol Burris, a former New York high school principal who is executive director of the nonprofit Network for Public Education. She was named the 2010 Educator of the Year by the School Administrators Association of New York State, and in 2013, the same organization named her the New York State High School Principal of the Year. She has been chronicling problems with corporate school reform for years, including with a series about troubled charter schools in California.

On Jan. 11, the Senate education confirmation will hold confirmation hearings on Betsy DeVos, the Michigan billionaire selected by President-elect Donald Trump to be the next U.S. education secretary. She is an unabashed supporter of charter schools and has worked in the past against strong oversight of the schools. Senators asking her questions may want to ask her about charter oversight and the dynamic around charters in Pennsylvania and the Bethlehem Area School District, as described by Burris.

By Carol Burris

Bethlehem is a proud city with a tidy historic downtown that appears well-kept and well-intentioned. Income is below the national average, and unemployment is slightly higher, yet it is still in far better shape than neighboring small cities such as Allentown.

The Bethlehem Steel Plant that once kept the economy robust closed down about 20 years ago. Now the small city is a small tech hub with tourism, major medical networks and local universities providing work for its nearly 75,000 residents.

The public schools of the city do a fine job serving their majority minority students, of whom nearly 60 percent receive free or reduced-priced lunch. There are few dropouts, and an outstanding music program keeps kids engaged. Bethlehem’s two high schools offer AP courses, and SAT scores are consistently close to or above the national average, with most students taking the test.

It has not been easy supporting the public schools, however, given the financial challenges of the city. In addition, the district suffered a financial crisis in 2008 and then reeled under massive cuts in state aid in the 2011-12 school year. But the worst hit of all has come from the continuing and increasing siphoning of district dollars to charter schools — a whopping $25 million this year alone.

I went on the road to Bethlehem shortly before Christmas to understand the effect of charter schools on Pennsylvania’s district public schools. I was told that Bethlehem was a good example of how public schools are victimized by the lax charter school laws of Pennsylvania, whose own auditor general has labeled, “the worst charter school laws in the nation.”

All of the problems associated with charter schools, such as, siphoning of public school funding, increased segregation, scandalous recruiting practices and blatant profiteering can be found in charters in and surrounding America’s Christmas City.

The public school fund drain from charters

Pennsylvania requires districts to pay the charter school a per-pupil tuition fee based on how much the district spends on its own students. In Bethlehem’s case, its per-pupil charter tuition cost per general education student is $10,635.77 and $22, 886.44 per special education student. In addition, the charter school students receive transportation funding from the taxpayers for attending any charter school located in the district or within 10 miles of any district boundary.

The argument that charter proponents make is that since the school is no longer educating the student, the per-pupil amount it sends to the charter represents real savings for the district. But anyone who understands school finance knows that assumption is ludicrous.

If class size is reduced from 28 to 27, or even to 25, you still must retain the teacher and her salary remains the same. The school does not lose a principal, custodian, cafeteria server or school nurse, even when sizable numbers leave. You can’t lower the heat or turn off the lights because some students and their funding have left for charters.

Joseph Roy is the superintendent of the Bethlehem Area School District (BASD). He helped put the district back on its feet after the 2008 fiscal crisis. This year, he was chosen by his peers as Pennsylvania’s Superintendent of the Year.

I asked Roy just how much the district loses on charter school tuition and how much it would cost if all of Bethlehem’s 1,944 charter school students came back to the district. Roy told me that the district budgeted $26 million (about 10 percent of its annual budget) this year to pay for tuition and associated costs to charter schools. According to Roy, “We estimate that if all of the students in charters returned, even with hiring the additional needed staff, we would save $20 million. This is the cost of school choice.”

Roy talked about all of the things he could do for district kids if only that money came back.

“What we have lost is a lot of the ‘equity actions’ that help students who need the most help,” he said. “If we weren’t spending so much on charters, we would have more academic and social supports for our students living in poverty. We would have more professional development focused on equity and literacy. We would have social workers. And, importantly, we would not have raised property taxes to the extent we have if not for the charter expenses. The local working-class people of BASD are shouldering the cost of charter schools due to the state’s lack of financial support and lack of desire to correct the problems.”

Because the Pennsylvania charter tuition formula is based on per-pupil spending, some districts are hit even worse. The New Hope-Solebury School District, for example, pays nearly $19,000 for every general education district student that elects to go to a charter school and almost $40,000 for every special education student. Those costs must even be paid to cyber charters that have no facilities costs at all.

In the case of special education students, the charter gets the higher rate, no matter how mild the disability, and it does not have to prove that it spent the money on special education services. Profits can become so lucrative that Pennsylvania Cyber Charter founder Nick Trombetta spent $8 million of taxpayer dollars for extravagant homes and an airplane. When Trombetta was arrested, it was not for the exorbitant profits, which were legal, but for tax fraud.

It is hard to understand why every taxpayer in Pennsylvania is not outraged at a legislature that repeatedly rejects sensible calls for reforms. When cash is flush and regulations are thin, those who seek to profit appear, and they ensure reform is thwarted.

Bethlehem Area School District experienced this firsthand.

Unethical student recruiting and private profit

Last August, a promotional flier with the return address of a new charter school, Innovative Arts Academy Charter School, appeared in mailboxes of Bethlehem district residents. The flier, which had a picture of a forlorn student with his head in his hands, along with information regarding a local high school drug arrest said, “Why worry about this type of student at school? Come visit Arts Academy Charter School. Now enrolling grades 6-12.”

Bethlehem residents were outraged. The new charter school’s CEO, Lorraine Petrillo, immediately denied any involvement in the flier.

By the end of the month, Petrillo had resigned. Not only was she disturbed by the flier, which many inaccurately assumed was sent by her, Petrillo’s Social Security number had been used by the charter school in an attempt to obtain a fraudulent loan. When the charter board then accepted a $100,000 loan from the school’s landlord, she had had enough. In an email obtained by the press, Petrillo had the following to say:

“For the life of me, I don’t understand why the board is still seeking the landlord or associated company’s involvement in our financing after this past weekend. It might be ‘legal’ but certainly, in my humble opinion, unethical.”

The landlord to whom she referred was real estate developer Abe Atiyeh. In 2007, Atiyeh had purchased the property in which her school would reside for $900,000. The month he bought it, he sold it for one dollar to Catty Schools LLC, a privately held company that lists him as its principal. The first attempt to house a charter school in the building failed when the Thomas Paine Charter School could not get approval.

Prior to its departure, Lehigh Valley Christian was sharing Atiyeh’s building with the Medical Academy Charter School, which was founded by Atiyeh’s friend, Craig Haytmanek, in 2012. In 2013, Medical Academy also paid rent costing $295,088. The next year, it paid $404,717 to Linden Land Development LLC, another corporation at the Atiyeh address. It is unknown what the charter paid for rent in 2015 or in 2016, its final year of operation.

In its place, however, would be yet another charter school, the Innovative Arts Academy Charter School, the school with the anonymous flier to which Atiyeh loaned $100,000. Members of the board of the failed charter, including Haytmanek, were members of the applicant board[1]. Atiyeh, of course, receives the new charter’s rent as well[2].

On the road away from Bethlehem, I stopped by the Innovative Arts Academy. I saw a teacher and two students hanging out on steps facing a large parking lot. The school banner was torn. A dumpster was placed in front of it. The teacher told me that school enrollment was now below 300. He said that he and the students were filming, what I don’t know. This year, well over $2 million from neighboring districts in the financially strained Lehigh Valley will go to the charter school.

The Senate Education Committee plans to hold its confirmation hearing this week on Betsy DeVos, President-elect Donald Trump’s choice for U.S. secretary of education. DeVos believes that the marketplace of charters and choice is better than the stability of the public schools of Bethlehem. If poor parents buy the hype of anonymous fliers, then buyer beware. In the world of DeVos, the cream rises to the top, and the strongest will survive.

That is the founding principle of “school choice.” But what I learned in Bethlehem is both simple and clear. Pennsylvania’s politicians, like those in so many states, have neither the stomach nor the will to curb the abuses of charter schools as they drain the public school coffers. America must choose either a patchwork of online schools and charters with profiteers on the prowl, or a transparent community public school system run by citizens elected by their neighbors. A dual school system with the private taking funding from the public, simply cannot survive.

[2] Atiyeh leases additional properties to charter schools that he helped start, also under controversial circumstances. Instances include a side deal with the Allentown School Board and using paid consultants to recruit charter school students.